Some of the State's largest companies are coming together to purchase their own natural gas and electricity overseas because the prices available in the Republic have become too high.
In a move which could provide serious competition for State-owned companies like Bord Gáis and the ESB, the companies will pool their purchasing power to get discounted prices from international sellers of gas and, in time, electricity.
A new organisation, the Irish Energy Co-Operative Society, is expected to be registered with the Registrar of Friendly Societies shortly. Several large manufacturing firms intend to become members of this group.
This co-op will be able to bypass suppliers like Bord Gáis and source its own gas on the international markets. It intends working with a Dublin company called Vayu to achieve this.
While gas is the main focus of the initiative at this stage, a spokesman for Vayu said the electricity market was also being studied. Electricity could be imported into Ireland via a new inter-connector between Ireland and Britain.
The Commission for Energy Regulation (CER) last night welcomed the initiative. "Anything new like this that increases competition in the energy sector has to be welcomed," said a spokesman.
Dissatisfaction over high gas and electricity prices has prompted the companies to set up the new entity. The number of companies involved and their names has not been disclosed at this stage. The organisation will utilise massive purchasing power to import cheap gas from Britain and other overseas markets. While it will have to use the Bord Gáis distribution network, it will not need to buy gas directly from the State-owned company.
The first company is expected to benefit from the new arrangements this April. Domestic customers are not set to benefit from the moves, although this might change in the future.
The co-op will be non-profit and consequently should be able to undercut prices offered by Bord Gáis. The co-op will work with some of the 250 companies in the segment of the gas industry known as the "eligible market". The eligible market refers to companies using half a million standard cubic metres of gas annually.
Vayu's managing director, Mr Tony Ennis, said: "There is a lot of dissatisfaction among energy users about prices generally. If there wasn't concern there would be no room for such an initiative. At the end of the day energy costs are at the top of the list for a lot of businesses".
Among those involved in Vayu is Mr Rory O'Neill and he said the co-op would have to pay a tariff to Bord Gáis for carrying the gas, but this would be regulated by the CER.
The energy regulator, Mr Tom Reeves, approved a 9.1 per cent increase
in prices for Bord Gáis earlier this year. The company wanted a 17 per cent increase.
Bord Gáis has strongly rejected the accusation that the cost of gas is too high. It said gas prices remained well below the EU average.